Forest industry’s challenge to manage supply fluctuations

Forest industry’s challenge to manage supply fluctuations

The pan forest and timber processing industry organisation, the New Zealand Wood Council (Woodco) says there is a supply challenge for many regions in the domestic processing industry.

Woodco Chair, Brian Stanley says timber processors are being hindered by a current lack of logs, especially in the higher grades.

He says small scale woodlot owners are being enticed into quick export contracts instead, where the buyers are not providing the domestic processors with an opportunity to purchase these logs.

“The problem is not so much with the large scale dedicated forest operators who depend on being able to supply a constant volume into both the local and export markets and are managed and equipped for this.”

“In many areas small scale owners would do well to get expert advice on terms and conditions for their sale and who to sell to, and not rush into contracts just because their logs are nearly mature. A slightly longer term view might provide a better return.”

Brian Stanley says the security of future investment into both forestry and processing in New Zealand has suffered from fluctuations in government policy during the past 30 years.

“If anyone is going to invest in more processing, they need to be sure that there will be a continuous supply of logs, especially where small farm scale woodlots are an important source of that log supply,” Brian Stanley says.

“This requires stable and long term policy. Woodco is united in its positon that government should not attempt to control price or volume on forest products or production. That wouldn’t work.”

Brian Stanley says nobody can do anything now about the variable government incentive policies that have influenced planting over the past two decades, especially for small scale woodlot owners, and the resulting fluctuations in harvest a number of years later.

“The forest industry is our number two primary export earner behind dairy, and is too important and long term to be subject to government influenced or controlled variable pressures outside the marketplace, such as the mad fluctuations in the prices for carbon credits we’ve seen in the past six years.”

Brian Stanley says the benefits to New Zealand of a confident forest industry are many.

“Forestry is a major player in regional development. Our trees lock up close to half a billion tonnes of carbon. And timber is an ideal, affordable and robust building material.”

Brian Stanley says there are a range of government policies which would help further develop local processing capacity and competitiveness, from more research into wood processing, through to accelerated depreciation and rural roading assistance.

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